Iberdrola USA And UIL Holdings To Merge - Quick Facts

(RTTNews) - Iberdrola USA and UIL Holdings Corp. (UIL) announced that they have entered into a definitive agreement under which Iberdrola USA will acquire UIL and create a newly listed U.S. publicly-traded company. UIL's current President and Chief Executive Officer, James Torgerson, will become the company's CEO upon closing.

The agreement has been unanimously approved by both companies' Boards of Directors.

The proposed transaction implies total value per share to UIL shareholders of $52.75, including $10.50 per share paid in the form of cash, representing a 24.6% premium to UIL's closing share price on February 25, 2015, and a 19.3% premium to the average closing price over the past 30 days.

The combination will be immediately accretive to UIL's cash flow profile and includes a $10.50 cash payment for each share currently owned.

The Combined company intends to invest $6.9 billion in regulated electric and gas infrastructure and other capital expenditures over next five years to maintain high levels of reliability and customer service.

Upon completion of the transaction, it is expected that long-term earnings per share will grow by approximately 10% annually through 2019. The combined company will initially set its dividend at UIL's current quarterly dividend of $1.728 per share, and will target a competitive dividend based on a 65% to 75% payout ratio long-term.

Torgerson will become CEO of the combined company and will select and lead a U.S.-based leadership team from among the UIL and Iberdrola USA business leadership. Iberdrola and UIL will continue to have offices in New Haven, Connecticut, Massachusetts, Maine and New York.

At the close of the transaction, Torgerson, in addition to two current UIL directors, will join Iberdrola USA's Board of Directors. The Board of Directors for the newly-listed combined entity will consist of up to nine Iberdrola USA directors.

The transaction is subject to regulatory and UIL shareholder approvals and other customary closing conditions. The transaction is expected to close by the end of 2015.

Today, UIL also announced 2014 financial results and guidance for 2015. UIL reported 2014 GAAP-based earnings per share of $1.92. Excluding non-recurring costs, which were primarily related to the Company's proposed acquisition of Philadelphia Gas Works, earnings per share was $2.26.

UIL's consolidated earnings for 2015 are expected to be in the range of $2.30 to $2.50 per share. Analysts polled by Thomson Reuters expect the company to report earnings of $2.43 per share for fiscal 2015. Analysts' estimates typically exclude special items.